That huge “career trade” Euro-short that everyone was talking about last year is back with a vengeance, and anyone who didn’t get in then is getting in now.This is “real disaster insurance,” a London-based hedge-fund trader told the WSJ. “People are selling the crap out of the euro in every way possible.”
Here are some examples of huge Euro short trades, via the Wall Street Journal:
According to a Deutsche Bank note to a client, one “U.S. house” bought a very large amount of one-month euro/dollar put options with a $1.40 strike price on Tuesday and Wednesday.
At Bank of America, brokers saw someone buy a $1 billion put option with a strike price of $1.30 and an end-of-year maturity date.
Another BOA client bought a $500 million put option with a strike price at $1.30, but the option doesn’t kick in unless the euro falls to $1.10. (Such “knock in” features make options cheaper, since the options are less likely to be triggered.)
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